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What is a candlestick?

Doji

White Day

Black Day

More than 200 years ago, the Japanese were using their own style of technical analysis in the rice market. This style evolved into the candlestick technique currently used in Japan.

Candlestick charts are a useful stand alone tool. They can be merged with other technical tools to create a synergy of techniques. Certain Candlestick combinations may imply a period of consolidation; Others hint of a forceful price move. They give deep insight into the market conditions.

In the Japanese candlestick, one of the major elements is the body of the candlestick. The difference between the open and close prices makes a box which we call real body. A black body means the close is lower than the open, and a white body means the close is higher than the open. Usually there are extension lines come out from the ends of the real bodies, they are called shadows. Those lines represent the high and low prices for the trading days.

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